Credit Card Perks for Holiday Shopping

By Kelli B. Grant
Senior Consumer Reporter, SmartMoney.com

So you've finally figured out what to get everyone for the holidays. You've made your shopping list and checked it twice. But before you head to the mall, you should make one final review -- of your credit cards.

Putting holiday purchases on plastic can yield better deals than other methods of payment, assuming it doesn't entice you to spend more than you would otherwise. Not only are issuers dangling promotional interest rates and seasonal rewards, but regular benefits can lead to better deals and shopper protections long after purchases are unwrapped.

Here are five perks that your credit card may offer over the holidays:

1. Return Guarantees

Desperate retailers began rolling out the holiday sales well before Halloween, promising early deals that are on par with those typically reserved for Black Friday. But with nearly two months of shopping days left until Christmas, buying a present now puts you well outside stores' 14- to 30-day return policies should you (or the recipient) have a change of heart.

But if you just can't resist those early holiday deals, then make sure you shop with a credit card that offers a return guarantee (sometimes called "return protection"). Card issuers that provide this guarantee will take back most items that the retailer will no longer accept, up until 90 days of the original purchase, says Scott Bilker, founder of debt management site DebtSmart.com. Most American Express cards carry this benefit, as do many issuers' Platinum Visa cards. Check your card benefits statement, or call your issuer for details. (Just don't confuse "return protection" with similarly-named "purchase protection," which only reimburses you for stolen or damaged items.)

Sample Savings: The American Express Preferred Rewards Green card offers up to $300 back per item within 90 days of purchase. Use it to buy the Barbie Jam With Me electronic keyboard with built-in song chip and sing-along microphone only to discover on Christmas morning that your daughter really wants the line's guitar instead, and you won't be out the $50 it cost to buy the first Barbie.

(Limit your need for returns by making sure you don't give dud gifts. Click here for an assessment of online personal shopping sites.)

2. Holiday Reward Bonuses

Forget rewards programs that give you one point per dollar spent. "During the holiday season, issuers sweeten the deal to entice you to use their card," says Curtis Arnold, founder of credit card information site CardRatings.com. It's all the more reason to concentrate your spending onto one rewards card. Check your issuer's rewards program page for details on holiday deals. Check the mail, too. Chase recently mailed cardholders bonus offers good through Dec. 31. Enroll your card, and you'll get a choice of rewards (including triple points and free gift cards) when you meet certain spending thresholds.

Sample Savings: Discover's annual mall promotion offers cardholders $20 back for every $200 they spend on the card. Just present your mall receipts at the Discover card booth at one of 160 participating malls by Jan. 4, 2009.

(Rewards are nice, but make sure you're getting the best total price, including shipping and tax. Check out our test of price comparison search engines here.)

3. Price Adjustments

As stores slash prices to keep consumers shopping, it's all too easy to buy an item today and discover three weeks later that the same item has been deeply discounted. Price adjustment policies, but only for discounts that occur within the first week or two.

Some credit cards will extend that period to 60 days, refunding the price difference up to a set amount if you spot a better deal at the store or at its bricks-and-mortar competitor, says Edgar Dworsky, founder of consumer advocate site ConsumerWorld.org. "Price protection" isn't a common benefit -- it may only be offered on one or two of an issuer's gold- or platinum-level cards -- and it doesn't always make it into the cardholder agreement. Call your issuer to see if you're covered.

Sample Savings: The Citi Premier Pass Elite offers a one-time price adjustment of up to $250 if you find a better price within 60 days. Buy the new LG Blu-ray player at its full retail price of $350, and that timeframe sees you through both pre- and post-holiday discounting.

(While price adjustments are likely this season, don't rely on them as a foolproof spending strategy. Try these sites to keep spending within your means.)

4. Exclusive Store Coupons

Credit-card brands and issuers often forge relationships with retailers to provide exclusive online promotion codes and coupons when you pay with their card. Before you shop, check out seasonal offers at American Express, MasterCard and Visa.

Sample Savings: MasterCard is currently offering a print-out coupon for $20 off a $100 purchase at electronics chain Crutchfield (good through Dec. 31). Visa offers 10% off and free shipping at BlueNile.com (good through Feb. 28, 2009), while American Express lists a discount of 15% at F.A.O. Schwarz (good through Dec. 30).

(With so many coupons out there, you'll rarely need to pay full price. Click here for a rundown of the best coupon sites on the web.)

5. Extended Warranties

Shelling out cash for an extended warranty is rarely worth it. Odds are slim that your gadget will malfunction after its manufacturer's coverage expires (but before an extended warranty would), and that the repair cost will be more than you paid for the extended warranty in the first place.

But that doesn't mean you need to leave your gadgets unprotected. Plenty of credit cards -- including most from American Express and World MasterCard -- automatically double the warranty period for items you purchase with their cards, says Arnold. They add up to another full year's protection, during which time the credit-card issuer takes responsibility for repairing or replacing defunct items.

Sample Savings: Use your Barclays Travelocity Rewards World MasterCard to buy a Canon PowerShot 10-megapixel camera ($237) from Best Buy and the card automatically doubles the camera's one-year warranty. By using Barclays' card, you save $44.99 -- the cost of buying a two-year store protection plan.

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